rumor: Borders to merge with Barnes and Noble (B&N)?
Would Borders Merge With B&N?What are we to make of the fact that the Pershing Square Capital Management hedge fund revealed in a recent SEC filing that it owns shares in both Borders and Barnes & Noble? David Polonitza of SeekingAlpha focuses on Pershing’s track record for shareholder activism to speculate (very wildly) on the possibilities of a merger between “the number #1 and #2 big box book stores in the country.” He explains the logic behind the hypothetical move: “There would be considerable cost savings in merging the two companies with respect to distribution, management, along with the increased purchasing power. Each company’s online presence is still not competitive and they might fare better combined…a much stronger competitor to the likes of Amazon than they are apart.”
From a cost-cutting corporate shark point of view, why not? The two companies have essentially duplicate infrastructures and there is no really significant differentiation in their value propositions. Why not put all the stores under a common management and get rid of half the infrastructure?
Just as long as it’s not the Borders half they get rid of … that would be a horrendous blow to Ann Arbor, already reeling from the loss of Pfizer.
Technorati Tags: Borders, Pfizer, Ann Arbor, BGP
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